Discussing the stock, page-8

Good discussion on portfolio management & beta values. But I think at this point the discussion is fairly academic.

The reason being, the critical issue for AKK right now (having managed to complete the placement & PO and so raised enough funds to buy the IOG lease plus working capital till maybe the end of the quarter) is how are they going to fund further drilling of the stated 6 well program?

Yes they will obtain some revenue from the operating IOG wells (presumably from transaction completion date, which may not be for another month as all the paperwork gets completed, etc). So I don't think AKK will see much revenue from those IOG wells this quarter. So that doesn't help them with working capital for more drilling.

We also have heard nothing about production from Magellan - no 30 or 60 day IP rates. And the jury is still out on Columbus & Marco Polo.

They have stated they will be seeking debt funding to finance further drilling. However the P1 reserves on their existing leashold is only 4,000 bbls. They have also not stated what the P1 reserves are for the IOG leases to be acquired. It won't be nothing but is it sufficient to secure a borrowing base facility? They haven't said.

So the reason I think the preceding discussion is academic is because we are looking at a binary event, i.e. only 2 possible outcomes - they can get funding for more working capital or they can't. The 2 possible sources for that are:

1. Debt funding secured against P1 reserves, although stated P1 reserves including IOG leases is very low
2. More equity funding - by further capital raising - needed fairly soon despite having only just managed to scrape through on this round.

So imo its a binary situation with a low probability of a successful outcome, based on current publicly available information.

Cheers, Sharks.